What is NICO?
What is NICO?
This fact sheet contains information on not in common ownership (NICO) titles created from plans of subdivision and consolidation.
What is a NICO plan?
A NICO plan is a subdivision or consolidation by the registered proprietors of two or more titles held in different ownership.
For example:
Arthur Albert of 10 Orange Street Melbourne
is the registered proprietor of the land in
Vol 1234 Fol 567.
(subject to mortgage ZZ444 to Australia Bank).
Bill Brown of 12 Orange Street Melbourne
is the registered proprietor of the land in
Vol 9874 Fol 563.
Arthur and Bill have agreed to alter the boundary
between their properties.
This can only be achieved by completing a two
lot NICO plan of subdivision.
The boundary between the properties is
altered to a new position – creating lots 1 and 2.
Proprietorship of lots in new plan
A plan of subdivision or consolidation changes boundaries; it does not alter proprietorship.
As shown in the next diagrams, the proprietorship for lots 1 and 2 is NICO. Lots 1 and 2 both comprise parts of the land previously contained in each of Vol 1234 Fol 567 and Vol 9874 Fol 563.
The proprietorship of lots 1 and 2, both being NICO, will be shown on the new titles as:
As to the land formerly contained in Volume 1234 Folio 567
Sole proprietor – Arthur Albert of 10 Orange Street Melbourne
As to the land formerly contained in Volume 9874 Folio 563
Sole proprietor – Bill Brown of 12 Orange Street Melbourne
What is a NICO title?
A NICO title is a title created from a lot on a plan of subdivision or consolidation where the land is owned collectively by different registered proprietors of former titles.
Transferring a NICO title
As a plan of subdivision or consolidation does not transfer proprietorship, it is necessary to resolve the proprietorship of the NICO titles by means of a transfer of land.
When transferring a NICO title, all registered proprietors of the new lot must join in as transferors.
In the above example, lots 1 and 2 would be transferred in the following manner:
Lot 1
Arthur Albert and Bill Brown (Transferors)
to
Arthur Albert (Transferee)
Lot 2
Arthur Albert and Bill Brown (Transferors)
to
Bill Brown (Transferee)
When transferring, the whole of the new lot must be dealt with.
The Transfer of Land form(s) should be lodged at Land Victoria with the plan of subdivision. The form is available on the Transfer of Land Act page at www.delwp.vic.gov.au/property-forms>Transfer of Land Act.
Mortgages and NICO titles
As Arthur Albert’s title was subject to mortgage ZZ444, the NICO title created for lots 1 and 2 would be encumbered by that mortgage over only part of the new lots (see diagrams on previous page).
In these circumstances, the mortgagee (e.g. Australia Bank) would not be able to exercise its power of sale if the mortgagor defaults.
Assuming that the Australia Bank, through the nomination process, is the nominating party for the parent Certificate of Title Vol 1234 Fol 567, both new Certificates of Title for lot 1 and 2, as a result of being encumbered in part by mortgage ZZ444, will issue to the Australia Bank.
New practice
From 1 October 2016, Land Victoria will not register a NICO plan unless all accompanying transactions are lodged to resolve the results of a not in common ownership plan.
The transactions required would typically include discharges of mortgage, transfers and new mortgages. Transactions resolving NICO issues should be lodged at Land Victoria, level 23, 570 Bourke Street Melbourne, or electronically through an electronic lodgement network (e.g. PEXA).
New Certificates of Title will issue to either the nominating party or the lodging party.
In the Arthur Albert and Bill Brown example outlined earlier:
· the Australia Bank would discharge mortgage ZZ444 over lots 1 and 2
· transfers would be lodged to resolve the NICO proprietorship for both lots 1 and 2
· the Australia Bank, or its representative, would lodge a new mortgage over lot 1 to follow the transfer.
The mortgagee (Australia Bank), or its representative, would receive the Certificate of Title for lot 1.
The lodging party for the transfer of lot 2 will receive that Certificate of Title.
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